Arbitrator Update

Arbitrator Profile: Bill Cousins

Bill Cousins' advice to new arbitrators, or anyone jumping into something new is, "Talk to the guy in the gray hair, he's there for a reason." Although Bill has years of experience in the financial industry, and has survived never-ending tuition payments for his five children, it doesn't show. He is charismatic, energetic and just plain fun to be around.

After graduating from Xavier University in Cincinnati, Ohio, and taking a year off to travel Europe and the U.S., Bill started working in the manufacturing business. In his spare time, however, he surrounded himself with friends who worked at the Chicago Board of Trade (CBOT). Needless to say, he eventually threw his hat into the financial arena, and a career was born.

Early on, one of Bill's mentors insisted he spend time learning the operations side of the equities and derivatives markets, along with the risk side. This big picture approach enabled Bill to learn a great deal about the industry overall. He then became an active participant at Options Clearing Corporation (OCC) as well as a board member for an equity depository and derivative clearing house. Bill also spent a year in London working for a Dutch investment bank. All of these experiences were instrumental in helping Bill and his partner establish a clearing firm which, at one time, was the largest Designated Primary Market Maker in the country.

With this significant accomplishment under his belt, Bill eventually sold the business and took some time off to figure out his next business venture and spend time with his family. During that time, Bill did everything from consulting to teaching at a small private college on Michigan Avenue in Chicago. Throughout the years, he has obtained seven registrations (3, 4, 7, 9, 24, 53 and 66) and has been involved in the business conduct and regulatory oversight committees for the Chicago Board Options Exchange (CBOE), CBOT, Chicago Mercantile Exchange and One Financial.

Bill's involvement in Arbitration began in the mid 80s when he started working with the Arbitration Committee at the CBOE. Today, Bill spends time serving as an arbitrator for self-regulatory organizations such as the CBOE, FINRA and NFA. Bill enjoys being an arbitrator because each case is unique in its own way, and the breadth of experience he brings to his panels is invaluable.

Although Bill remains very involved in the financial industry, he cherishes his time with his family the most. While having three kids on the west coast and two in Chicago makes getting together difficult, they make it happen with trips to central locations such as Park City, Utah. From his experience in the financial industry to his experience raising a family, Bill is the epitome of the kind of arbitrator NFA is proud to have on its roster.

HotTopics

MF Global, Inc. Bankruptcy

As you probably know, on October 31, 2011, the United States District Court Southern District of New York entered an Order granting the Securities Investor Protection Corporation's request to put MF Global Inc. (MF) into liquidation.

Under the terms of that Order, the automatic stay provisions of 11 U.S.C. §362(a) of the United States' Bankruptcy Code operate as a stay of all judicial, administrative or other proceeding against the Defendant, MF. Therefore, NFA cannot proceed with arbitration claims against MF, and we have terminated them as a party in all NFA Arbitrations. Depending on the outcome of the liquidation and/or bankruptcy proceeding, Claimants may be able to pursue their claims against MF at a later date.

Swaps Information

On January 11, 2012, the Commodity Futures Trading Commission (CFTC) approved final registration rules for swap dealers (SDs) and major swap participants (MSPs). The CFTC also delegated SD and MSP registration authority to NFA.

On January 19, 2012, NFA began accepting registration applications for SDs and MSPs and launched a new section of its website to provide information and guidance to SDs and MSPs. More swaps information is available on NFA's website.

Statistically Speaking

Arbitration filings continued to decrease in 2011. We received a total of 88 claims, which is a 36% decrease from calendar year 2010, and the lowest number of claims received in recent years. Although case filings were down, turnaround time was up slightly with respect to oral hearings which took, on average, just over 15 months from start to finish. The increase in turnaround time is primarily due to an increase in postponement requests as well as amended claims, which require us to reset the discovery timetable. Summary proceedings continued to move quickly through the process in 2011 though, with an average turnaround time of seven months.

In addition to processing new cases, staff closed 134 cases this past year, which is in line with previous years. Forty-three percent of the closed cases resulted in an oral hearing or summary proceeding, while 28% of the cases settled and another 28% were rejected or withdrawn. Of the awards that were issued, customers prevailed 56% of the time and were awarded, on average, 49% of their compensatory damage requests.

Staff Update

Inquiring minds want to know...what has Cynthia Cain Ioannacci been up to since leaving NFA's Arbitration Department?

As many of you know, Cindy was in charge of the Arbitration Department from 1986 through 2001, when she decided to transfer to a new area in NFA's Compliance Department and work with contract markets which outsourced certain regulatory responsibilities (e.g., trade practice and market surveillance) to NFA. The following year, Cindy's job was expanded to include NFA's business development and strategic planning initiatives. These new responsibilities, along with her dispute resolution background, prompted Cindy to consider another career-as an attorney-and she was accepted to Loyola University Chicago School of Law in 2005. While attending law school in the evening, Cindy continued to work full-time in various areas at NFA. During that time, Cindy acted as a liaison between NFA's Legal and Compliance Departments working on NFA disciplinary cases, helped establish an Investigations Group within the Compliance Department to focus on firms and individuals that present the greatest chance for potential harm to customers, and served as a senior member of the Compliance management team. In May of 2009, Cindy obtained her law degree from Loyola and made the full transition to NFA's Legal Department in January 2011, where she currently works as an enforcement attorney. As you can see, Cindy has been very busy since she left the confines of the Arbitration Department!

The More the Merrier

We appreciate all your hard work as well as the skills and expertise you provide in resolving our cases. If you have any colleagues or friends you think would make good arbitrators, please encourage them to join our roster by contacting Judy Jenks at jjenks@nfa.futures.org. You can also recommend individuals to us, and we will contact them to see if they are interested.